Need for haulage liberalization

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We shouldn't forget that not so long ago Greece experienced shortages of bread as well as of gasoline. The price of a loaf of bread was controlled, putting bakers and government at loggerheads every year.

The victims of this price war were of course consumers. Bakeries would go on strike and the relevant minister would set a supposedly fair price for a loaf. Society was thrown into disarray and a financial problem invariably became a political headache. The price of bread was eventually deregulated, but the sector remains a closed one. The sale of bread made from frozen dough at supermarkets was in effect prohibited, so, with no real competition to worry about, bakers upped their prices, but at least they didn't close their bakeries.

Right now, Greece is running out of gasoline because the owners of tanker trucks are in disagreement with the government over road haulage rates. The government is offering a 5 percent increase, while the truckers, citing the rising cost of gasoline, are demanding 13 percent. Both of these figures are completely arbitrary because no one really knows what a fair price for road haulage is. It may be 5 percent, or 3 percent or even 20 percent. The only way to know would be by closely studying the market, a market in which gas station owners can choose their supplier. The tanker truck market, however, is a closed one, possibly a remnant from the days when the government tried to control everything. The result is that transportation costs are not only high, but we are also running out of gasoline. The government is now dealing with yet another economic problem that is affecting society.

Last year the Foundation for Economic and Industrial Research (IOBE) warned in a report that the legislation in force pertaining to road haulage is stunting growth in the sector, but also discouraging the modernization of tanker fleets, with grave consequences for road safety and the environment. The fact that the road haulage market has not been liberalized not only fuels the black market, but also raises the cost of haulage.

According to the IOBE study, restrictive measures applied in the domestic market (the only such measures in an EU country) created more problems that they attempted to solve and fewer benefits than drawbacks. The measures undermined an entire sector that they were supposed to be protecting and placed a burden on the economy as a whole.

The gradual and complete liberalization of the market will translate into a reduction of road haulage rates (by 1.5-2.5 percent annually), a reduction in the Consumer Price Index by 0.2-0.3 percent annually, a boost in employment (2-4 percent a year), higher productivity (1.5-2.5 percent a year) and, more importantly, it would mean that right now we could get gas.

KATHIMERINI English Edition, 14/05/2008